Force Majeure Events Under the Kuwaiti Law
Since the emergence of the Covid-19 pandemic, the world is experiencing severe crises due to the high toll of both human and economic losses. The state of Kuwait, similar to all countries around the world, commissioned many extreme precautionary measures under the Council of Ministers various resolutions since early March, among those measures are the temporary cessation of work in both the public and private sectors, the lockdown and etc. I have received many queries about the issue of commitments to the obligations arising from all sorts of contracts and agreements entered into, which were concluded before the Covid-19 crisis began, in view of the measures carried out by Kuwait and other countries. I was asked about the legal consequences as well as how to deal with such inability to comply with the obligations arising from those contracts and agreements.
Generally speaking, Kuwaiti laws issued for specific aspects do not directly address these exceptional situations, the occurrence of the crises or unusual circumstances, for example the Rent law, the labour law and etc. Hence, it is known for the law practitioners to refer to the “Civil Law code”, in absence of an article dealing with a specific matter. The civil law is the first reference or the so-called “general law for all laws” to determine the appropriate interpretation and application of the rule of law on certain matters. The Kuwaiti civil law regulated the occurrence of the unusual circumstances and the legal stances resulting from such unusual situations under article 198. The law discussed under this article the so-called theory of “Emergency circumstances” stating that if after the contract is entered into, and before its full implementation, general exceptional circumstances occurred which cannot be anticipated, the judge may return or decrease the obligation of the parties to a reasonable extent. Also article 293 of the Civil Code states that, If the obligations cannot be executed in kind, or delayed, the debtor must compensate for the damages suffered by the creditor as a result, unless the debtor proves that the failure or delay was due to a foreign reason that has no hand in it or was beyond his control. Accordingly, it is concluded from the texts of two articles that the exceptional circumstances which are currently witnessed may have the obligations under the contracts or agreements, depending on their type and nature, either fall under the rules of the theory of emergency circumstances (regulated under article 198) or under the rules of the theory of the force majeure “circumstances beyond ones control” (regulated under article 293). To clarify further and for the purpose of example only; the obligations arising from export & import contracts , or goods purchasing contracts from some countries and the inability to deliver such goods due to import or export bans regulations during these crises means that these force majeure events (importing & exporting banning resolutions issued in a country) may lead to the termination of the obligations arising from that contract. Basically, if the buyer does not pay the price ordered for the goods, then the seller is not obliged to deliver the goods. In essence, based on article 293 of the Kuwaiti Civil Code, the buyer in the above example cannot claim compensation for non-execution by the seller or delay in delivery, because those circumstances that prevented from adhering to the obligations are considered a force majeure event (resulting from a foreign reason beyond his control), whereas when looking at the emergency circumstances described under article 198, this rule deals with the obligations that have become cumbersome but not
impossible for the parties to carry out. In other words, the article refers to circumstances involving partial impossibility, which impends one of the parties to suffer a hefty or serious loss. In this case, the law left the consideration of assessing the emergency circumstances and impact of such circumstances on a party’s obligation in a contract to the court’s discretion. Thereby the court will look into to the principle of balancing the interests between the parties in a contract to ease or decrease the burdensome obligation to a reasonable extent. This leads me to conclude that the aftermath of the Covid-19 pandemic may lead us to witness many claims and lawsuits grounded on the fundamentals of the two articles of the Civil Law for various types of contracts and agreements.